Cheapest bank accounts in South Africa right now

Retail giant Shoprite has transformed its Money Market account into a fully transactional bank account – a first for a retailer in South Africa.

According to Shoprite, its Money Market account is the lowest-cost banking account in the country, carrying zero fees for everything except withdrawals.

It also now boasts one of the widest networks of points-of-presence for a bank, with customers able to make deposits and withdrawals for their account at any Shoprite till point across the country.

The Shoprite Money Market account joins a growing list of zero-fee accounts available in the country and an even longer list of entry-level accounts available to low-maintenance customers with basic banking needs.

Entry-level bank accounts vary greatly in form and functionality, with several lenders offering more than one account targeted at minimal transactions – with limits set on how much money can be processed each month.

2022 saw some changes to entry-level accounts at major banks, including a streamlining of accounts at Standard Bank, which has retired its Access account in favour of the MyMo Pay as you Transact account being its entry-level option.

New fee structures have also taken effect in the last few months, such as updates for the Bidvest GROW account and FNB’s prodcut suite.

Taking the newest entrant from Shoprite and the fee changes into account, BusinessTech looked at all the zero-fee and entry-level accounts available in the country to determine which are the most affordable – carrying the lowest monthly fees and withdrawal and deposit charges.

It should also be noted that many of these accounts offer rebates and interest on positive cash balances, which can offset many of the monthly transaction costs. These rebates have not been taken into account here.

Other benefits, including rewards, discount coupons, or sweeteners like airtime or data have also not been included.

Discovery Bank does not have an entry-level transactional account and thus has been excluded.

Monthly fees

Monthly account management fees for entry-level accounts have become a lightning rod for competition in the segment, with banks shaving cents off monthly charges to undercut competitors.

Given the basic nature of most entry-level accounts, the monthly handling fee is quickly becoming obsolete, with new entrants scrapping the cost altogether.

Among the 13 entry-level accounts we looked at, seven carry no monthly admin fee with the inclusion of the Shoprite account in the mix.

Capitec, which pioneered the low-fee account segment, has now become the most costly of the banks that are still charging a monthly fee. This fee can be absorbed by rebates within the account, but this is not factored into the analysis below.

Withdrawals

While digital banking and card payments are increasingly becoming the norm in South Africa, for most – especially those in the entry-level banking segment – cash is still king.

Even among middle and upper-income brackets, having cash on hand is still a necessity. Thus withdrawal fees – how banks structure the cost of getting physical cash out of your account – have often been a sore point.

Traditional banks have long relied on complicated fee structures to slice as much as they can off the top of any transaction but have since adopted simpler, more fixed price structures.

Banks with native or own-brand ATMs (or retailer partnerships, as with TymeBank and now Shoprite) reward customers for sticking to their systems with lower fees. Accessing your cash at a competing or non-partnered outlet incurs a higher cost.

Across all banking groups, there is no free lunch when it comes to getting your money out of an account. This is also the only fee Shoprite charges – taking R5 for every withdrawal. While this is one of the lowest fees, it is not the cheapest – TymeBank still carries that torch at R3 per transaction.

Deposits

Deposits are no longer as straightforward as they once were. In place of the more traditional methods of putting money into accounts – like depositing cash at the ATM or in-branch – banking customers can now also deposit funds through retailers and other digital means.

This has led to retailers partnering with new players in the market: Pick n Pay and Boxer store till points are the de facto ATMs for TymeBank, and bank accounts like Bank Zero do not have cash deposit options at all, with the only way to get money into the account through EFTs.

For more traditional banks, however, ATM and branch deposits are still the mainstay – though retail groups like Pick n Pay and Shoprite have added till-point deposits to their service offering.

The tables below break down transaction prices across entry-level accounts for select transactions.